Productivity will increase when more output is being produced for each unit of input compared with the previous year. Separate estimates of output, inputs and productivity are provided for healthcare, education, adult social care, children’s social care, public order and safety, and social security administration. Only inputs estimates are provided for the police, defence, and other services as output is not easily measurable, so we assume that output is equal to the inputs used to create them and therefore productivity change is zero. Output, inputs and productivity for total public services are estimated by combining growth rates for individual services using their relative share of total government expenditure.Back to table of contents
In 2013, productivity grew for total public services for the fourth consecutive year by 0.7% as output grew by 0.9% and exceeded inputs growth of 0.1%1.
The annual average growth rate2 of total public service productivity from 1997 to 2013 was 0.1% a year, compared with 0.0% from 1997 to 2012.
Output continued to grow slowly, with growth in 2013 almost exclusively due to an increase in output for healthcare services offsetting falling output in all other service areas except children’s social care and other government services.
Trends in total public service output, inputs and productivity estimates are mostly determined by changes in healthcare and education which together make up more than half of government expenditure on public services.
Dataset: Indices and growth rates for total public service output, inputs and productivity, 1997 to 2013, UK (42.5 Kb Excel sheet)
Notes for main points
- Growth rates may not sum due to rounding
- Average growth rates for cumulative growth across multiple years are geometric means calculated using the formula: [(index in current year/index in base year)^(1/(current year – base year))]-1
This release contains updated estimates of output, inputs and productivity for public services in the UK between 1997 and 2012, in addition to new estimates for 2013. Figures are published on a calendar year basis for consistency with the UK National Accounts. Our public service productivity estimates were developed in response to the recommendations of the Atkinson Review on the measurement of government output and productivity for the National Accounts (1.1 Mb Pdf).
Previously published public service healthcare and public service education output, inputs and productivity estimates are also included in this article, though in less detail than the separate articles.
Productivity of public services is estimated by comparing growth in the total amount of output with growth in the total amount of inputs used. Productivity will increase when more output is being produced for each unit of input compared with the previous year. Estimates of output, inputs and productivity are given both as growth rates, which show the change from the previous year, and as indices, which show the trend over time (1997 to 2013).
Estimated growth rates of output and inputs for individual service areas are aggregated by their relative share of total government expenditure (expenditure weight) to produce estimates of total public service output, inputs and productivity. The growth rate of services with the greater share of total expenditure will contribute more to the overall growth rate for total public services.
Inputs are composed of expenditure on labour, goods and services, and consumption of fixed capital and are adjusted for inflation using a suitable deflator1. Expenditure data used to estimate inputs growth is based on the MAAST supplementary data tables that we publish annually. These tables are consistent with estimates of government deficit and debt reported to the European Commission under the terms of the Maastricht Treaty. These tables are published on a calendar year basis and provide the required detailed breakdown by the Classification of Functions of Government (COFOG).
The method of measuring output varies between service areas as defined in table 1.
Table 1: Definitions of output measures
|Output Measure||Service areas||Definition|
|Quantity output||Social Security Administration||The number of activities performed and services delivered. Growth in individual activities are weighted together using the relative cost of delivery. For example, adult social care output includes weeks of residential care and number of “meals on wheels” provided.|
|Adult Social Care|
|40% of Children’s Social Care|
|Public Order and Safety|
|25% of Education|
|Quality adjusted output||90% of Healthcare||Quantity output is adjusted for the quality of the services delivered. If the quality adjustment is positive, estimates of output growth will increase. Healthcare quality is measured using a combination of indicators including survival rates, waiting times and patient satisfaction. Education quality is measured using examination performance.|
|75% of Education|
|Inputs=output||Police||Some services we cannot measure output directly, so we assume the volume of output equals the volume of inputs used to create them, meaning that productivity growth will always be zero.|
|10% of Healthcare output|
|60% of Children’s social care output|
Download this table Table 1: Definitions of output measures.xls (28.7 kB)
A table summarising the methods for each service area is provided in Annex A, and further information on methods is available in our public service productivity sources and methods paper (111.4 Kb Pdf).
Estimates in this release are provided for the UK, the amount of data included for each of the devolved administrations varies for each service area based on its availability. As England has the largest expenditure share, trends in output, inputs and productivity for England tend to determine the overall UK trend; therefore, much of the additional context provided in this article to aid interpretation of the estimates relates to services in England.
It is important to note that while these productivity estimates provide a measure of the amount of output produced for each unit of input, they do not measure value for money or the wider performance of public services. They do not indicate, for example, whether the inputs have been purchased at the lowest possible cost, or the extent to which the desired outcomes are achieved through the output provided.
The estimates in this release have an open revisions policy, meaning that each time a new article is published, revisions can occur for the whole of the time period. The majority of revisions in this article are due to delivery of updated government expenditure data in all service areas for the period 2010 to 2012 in addition to a new quality adjustment measure for education in England and changes to the treatment of academies in education. These changes to education methods (182.8 Kb Pdf) are explained in a previously published methods change paper.
The following sections provide more detailed data on output, inputs and productivity growth rates and indices for individual service areas. Where possible, commentary has been provided to aid interpretation.
Notes for understanding public service productivity
- There is some direct measurement of inputs in healthcare and education estimates such as number of staff.
The healthcare estimates given here have been previously published in Public Service Productivity Estimates: Healthcare 2013 which contains more detailed information on healthcare productivity estimates and methods. The base year for this article is 1997 compared with 1995 in the previously published article.
Healthcare is a principal contributor to overall public service productivity with the largest expenditure share, a third in 2012.
Healthcare productivity grew by 2.9% in 2013 due to quality adjusted output growth of 4.5% exceeding inputs growth of 1.6%. This is the fourth consecutive year of productivity growth and the second highest annual growth rate in productivity across the series, with the highest being 3.0% in 2011. The annual average growth rate of public service healthcare productivity from 1997 to 2013 was 0.9% per year compared with 0.7% per year for 1997 to 2012.
Strong quantity output growth in 2013 was driven by an increase in activities for hospital and community health services including trauma and orthopaedics, urology, cardiology, dermatology and oncology as well as increases in long-stay inpatient cases. There has been a steady downward trend in growth rates of GP-prescribed drug activities, partly due to a slowing of growth in the number of items prescribed and falling prices through negotiated discounts and increased use of non-branded equivalent drugs.
Quality of healthcare delivery is measured using a combination of indicators including survival rates, waiting times, primary care outcomes and results from the National Patient Survey. The quality adjustment added 0.2 percentage points to output growth in 2013, compared with the average annual quality adjustment of 0.4 percentage points since 2001 when the quality adjustment was first applied.
From 2010 to 2013, inputs grew more slowly than in any previous year in the series, falling slightly by 0.1% in 2011. The annual average input growth rate between 1997 and 2009 was 4.9% per year compared with the annual average growth rate of 1.1% per year between 2010 and 2013. This was driven by low growth in labour (measured as salary-weighted full-time equivalent staff numbers) and components of goods and services (administration, non-pay costs and delivery of non-NHS services). These trends coincide with the creation of the Health and Social Care Act 2012 which introduced major reforms to the local commissioning of services in England, and initiatives such as the Nicholson Efficiency Challenge and QIPP Programme (Quality, Innovation, Productivity and Prevention).Back to table of contents
The education estimates given here have been previously published in Public Service Productivity Estimates: Education 2013 which contains more detailed information on education productivity estimates and methods. The base year for this article is 1997 rather than 1996 in the previously published article. In 2012, one-fifth of total public service expenditure was on education; the second largest of all the service areas.
Education productivity fell by 2.8% in 2013 as a result of inputs growth of 1.0% combined with a fall in quality adjusted output of 1.8%. This fall in education productivity is one of the largest across the series, the lowest being 3.1% in 2002, and follows 3 years of productivity growth from 2010 to 2012.
Quantity output grew by 0.4% in 2013, driven by growth in pupil numbers in primary schools offsetting falls in secondary schools. Since quantity output is measured as the number of students adjusted for attendance, and schools made up 73.5% of education expenditure in 20121, changes in education output are mainly determined by changes in the school age population.
From 1997 to 2007, quality is measured using Key-Stage 4 (GCSE) average points scores (APS) for all examinations. From 2008 onwards, a new quality adjustment for England has been introduced based on Level 2 attainment at age 16, while APS continue to be used for Wales and Scotland. The effect of the quality adjustment is positive in the period from 1997 to 2011. In 2012 and 2013 the negative quality adjustment, at -0.5 and -2.2 percentage points respectively, led to the first fall in quality adjusted output in 2013. Caution should be exercised when interpreting the change in the quality adjusted output trend in recent years due to changes in examinations counting towards school performance statistics in England. As a result, some of the change in examination performance measures may not be entirely caused by changes in the quality of education provided.
Education inputs continued the recent trend of slowed growth since 2010, with an annual average growth rate of 0.6% over the period 2010 to 2013 compared with the annual average growth rate of 2.0% over the whole series from 1997 to 2013. This trend consists of labour inputs growth due to increased support staff numbers which are offset by a fall in the volume of goods and services.
The new education quality adjustment measure for England and changes to the treatment of academies were introduced in the latest estimates. Along with revisions to source data, these changes have led to downward revisions in the estimates for 2011 and 2012 compared with those previously published in Public Service Productivity Estimates: Total Public Services 2012. These changes are explained in more detail in the revisions section and the previously published Education Methods Change paper (182.8 Kb Pdf).
Notes for education
- The educational sectors included when producing productivity estimates are pre-schools, publicly funded private, voluntary and independent pre-school places (PVIs), primary schools (maintained and academies), secondary schools (maintained and academies), special schools (maintained and academies), further education, higher education initial training of teachers (ITT) and higher education training of health professionals.
Public order and safety (POS) had an expenditure weight of 3.8% in 2012. It encompasses activities carried out by:
courts and probation service (50.4%)
prison service (26.7%)
fire service (22.9%)
While part of the public order and safety government expenditure classification, the police service is treated as a separate service area for the estimation of productivity.
Productivity of total public order and safety services grew in 2013 by 2.0% as a result of productivity growth in the courts contributing 3.0 percentage points offset by productivity falls in the fire and prison services contributing -0.5 percentage points and -0.6 percentage points respectively1. On average between 1997 and 2013, productivity for total public order and safety has fallen by 2.0% per year. In 2013, output fell by 1.3% and inputs fell by 3.2%, the fourth consecutive year of falls in both.
The courts and probation services mainly drive variations in outputs, accounting for nearly half of total expenditure on public order and safety, and include:
legal aid services
Crown prosecution service
There was a fall in output for the courts and probation service in 2013 of 0.5% caused by falls in activity in all services except the crown prosecution service and crown court. This fall is consistent with the long-term trend with an annual average fall in output of 1.7% per year between 1997 and 2013, but is smaller than falls in the most recent years, with an annual average fall in output between 2010 and 2013 of 4.2% per year. The largest contribution to the fall in output in each year from 2010 to 2013 was from legal aid services, potentially attributed to the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which reduced the fees paid to legal representatives and narrowed the eligibility criteria for legal aid. Inputs for the courts and probation service fell by 6.4% in 2013 compared with an annual average growth in inputs from 1997 to 2013 of 1.9% per year. The fall in inputs in 2013 was driven by reductions in goods and services expenditure, though labour inputs also fell by a smaller amount.
The prison service in 2013 saw output fall for the first time since 2000, by 2.7%. The fall in output for prisons was the main contributor to the overall fall in output for public order and safety in 2013, contributing -0.7 percentage points to the overall fall of 1.3%. Prison output grew slowly between 2009 and 2012 compared with the historical trend; the Ministry of Justice’s Story of the Prison Population 1993-2012 explains the cause of this for England and Wales as a fall in total adult sentencing for indictable offences across all courts, and a decrease in the average time served. Additionally, a high prison population in December 2011 is linked to public order-related offences following the riots in England in August 2011. The large fall in inputs in 2011 was driven by falls in both labour and goods and services consistent with reductions in budgets following the 2010 Spending Review.
Overall output for the fire services fell each year since 2010, falling by 1.3% in 2013. The majority of activities in the fire services are responses to fires, but also include fire prevention activities and special activities such as assistance for road traffic collisions and flooding. The largest proportion of activities involved attending false alarms, which have decreased over the series. A corresponding increase in output for prevention activities could be linked to a decrease in activities for fire responses.
Notes for public order and safety
- Totals may not sum due to rounding.
Output for police services, defence and other government services is measured using the “inputs = output" convention which assumes that the volume of output is equal to the volume of inputs used in producing the output. As output will always be equal to inputs under this convention, productivity remains constant with a growth rate of zero. Combined, police, defence and other government services had an expenditure share of 31.8% in 2012.
Police inputs fell by 2.5% in 2013 having fallen each year from 2010 to 2013. Prior to 2010, inputs had been positive or slightly negative in all years except 2008, when inputs fell by 6.2% due to falls in goods and service expenditure outweighing increases in labour. Trends in police inputs do not directly follow trends in the number of police staff, as inputs include expenditure on both labour and goods and services and changes in expenditure on labour are a combination of both police numbers and salaries.
2013 saw the largest fall in defence inputs in the series of 3.3%. This fall is likely to be a reflection of falls in foreign military aid expenditure (HMT Public Expenditure Statistical Analyses 2015).
Other government services comprise all other classifications of government expenditure which are not covered in the other service areas. These service areas and their expenditure share of other services in 2012 are:
general government services (28%) which include:
- foreign affairs
- economic aid to developing countries
- basic research
- other services undertaken by government not specified by function
- foreign affairs
economic affairs (26%)
environmental protection (14%)
Inputs for other government services experienced strong growth early in the series which then slowed leading to falls in inputs between 2009 and 2011. There has been renewed small positive growth in 2012 and 2013 of 2.6%. This is attributed to increased expenditure on economic affairs and the environment. General government services and economic affairs services are mostly delivered by central government, while the remaining services are mostly delivered by local government. Local and central government expenditure has remained relatively evenly split, with each contributing around 50% to expenditure for other government services.Back to table of contents
Estimated growth rates of output and inputs for individual service areas are aggregated by their relative share of total government expenditure (expenditure weight) to produce estimates of total public service output, inputs and productivity. The growth rate of services with the greater share of total expenditure will contribute more to the overall growth rate for total public services. The stages of aggregation are outlined in the following figures:
Figure 9a shows the expenditure share of each service area in 2012
Figure 9b shows the productivity growth rate of each service area in 2013 and its contribution to total public service productivity growth after weighting by the expenditure share
Figure 9c shows the contribution of each service area to total public service productivity growth for each year 1998 to 2013
Caution should be exercised when comparing productivity growth between service areas as shown in Figure 9b, as methods of estimating output and inputs differ. Healthcare and education are the only service areas for which a quality adjustment is applied to quantity output, and are also the only service areas to measure inputs for labour using salary weighted staff numbers rather than expenditure. As police, defence and other services are measured as inputs = output their productivity growth is, by default, zero and are therefore these service areas not shown on Figures 9b and 9c.
In 2013, productivity growth for total public services increased for the fourth consecutive year by 0.7%, as output grew by 0.9% and exceeded inputs growth of 0.1%1. The annual average growth rate2 of total public service productivity from 1997 to 2013 was 0.1% a year, compared with 0.0% growth on average from 1997 to 2012. The small growth in inputs in 2013 is driven by increased inputs for healthcare, education and other government services. Output continues to grow slowly almost exclusively due to an increase in output for healthcare services offsetting the falling output in all other service areas except children’s social care and other government services.
Figure 9b shows that in 2013, falls in education and social security administration (SSA) productivity are offset by increases in all other areas, particularly healthcare. Education and healthcare are the main contributors to total public service productivity growth as together they account for more than half of total government expenditure on public services. In contrast SSA, which has much higher values of productivity growth and falls, makes a very small contribution as its expenditure weight is just over 1%.
Zero contributions to productivity growth from police, defence and other government services which use the inputs = output convention, have a dampening effect on productivity growth of total public services in proportion to their expenditure weight. Removing unmeasured output makes both negative and positive productivity growth stronger, with productivity growth of all services excluding unmeasured output of 1.1% in 2013. Annual average productivity growth from 1997 to 2013 remained at 0.1% per year with the removal of unmeasured output, as the annual average growth of output and inputs both increased by 0.3 percentage points per year.
Figure 10 compares total public service productivity with and without the quality adjustments for public healthcare and education services. The indices in Figure 10 show that over the series, the inclusion of quality adjustment increases total public service productivity from an overall fall of 6.1% to an overall increase of 1.2% compared with the base year of 1997. Non-quality adjusted productivity growth in 2013 was the highest in the series at 1.1%; however, the inclusion of the quality adjustment reduced this to a growth of 0.7%. Despite this, both quality adjusted and non-quality adjusted productivity growth in 2013 exceeded the long-term annual averages from 1997 to 2013 of 0.1% and -0.4% respectively. The effect of quality adjustment on healthcare output is small, adding 0.2 percentage points to healthcare output in 2013, with the majority of the effect of quality being from the education adjustment.
Caution should be exercised when interpreting the change in the quality adjusted output and productivity trend for both education and total public services in recent years due to changes in examinations counting towards school performance statistics in England. As a result, some of the change in the education quality adjustment may not entirely reflect changes in the quality of education provided.
Notes for Total public services
- Growth rates may not sum due to rounding
- Average growth rates for cumulative growth across multiple years are geometric means calculated using the formula: [(index in current year/index in base year)^(1/(current year – base year))]-1
Our public service productivity estimates operate an open revisions policy. This means that new data or methods can be incorporated at any time, and will be implemented for the entire time series of data. Revisions to estimates in this release are due to:
revisions made to source data by data providers
the replacement of forecast data with actual data, and re-estimates of forecasts and back-casts using more data points than previously available
a new method of education quality adjustment for England and changes to the treatment of academies in education estimates; a detailed account of these changes can be found in the paper Methods change in public service productivity estimates: education 2013 (182.8 Kb Pdf)
Previously published figures showed total public service productivity increasing in 2011 and 2012, after a period of limited growth between 2004 and 2010. Revisions in this article show this increase to be smaller than previously published, mostly as a result of methods changes in quality adjustment and the treatment of academies in the production of estimates for public service education. Annual average productivity growth has been revised downwards from 0.2% per year between 1997 and 2012 to 0.0%. This consists of annual average inputs growth revised upwards from 2.5% to 2.7% while annual average output growth remains unchanged at 2.7% over the same period.Back to table of contents
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